Upstart shares plunge as online credit market guidance disappoints

Upstart Holdings (UPST) reported higher-than-expected earnings and revenue for the September quarter. But guidance from the online lending market disappointed investors as UPST shares collapsed during trading on Wednesday.


Upstart reported third quarter results after the market closed Tuesday. Upstart’s earnings came in at 60 cents per share, up 253% from a year earlier. That surpassed analysts’ estimates of 33 cents per share in earnings for Upstart stock.

The company reported revenue of $228.5 million, an increase of 250%. That beat estimates of $215 million.

“Upstart once again raised its outlook for the fiscal year with revenue now estimated at $800 million versus $750 million previously,” Bank of America analyst Nat Schindler said in a report to customers. “However, compared to previous quarters with significant beats (Q2 increased the budget forecast by $150 million), the forward guide was likely below some investors’ expectations.”

UPST Stock launched IPO in December 2020

UPST shares fell nearly 16% to 263.58 during early trading in the stock market today. The company uses artificial intelligence tools when evaluating personal and automatic loan applications for banks.

Upstart launched an initial public offering in December 2020, with shares priced at 20. UPST shares peaked at 401.49 on October 15. But Upstart shares hit sell signals shortly after.

Upstart’s platform collects consumers who want to take out a loan and refers them to banks using AI technology. Banks can also pay to add Upstart technology to their own websites or mobile applications, the BofA report said.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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